Marketing Tasks 7
- Each party is free to accept or reject the exchange offer.
- Each party believes it is appropriate or desirable to deal with the other party.
Whether exchange actually takes place depends upon whether the two parties can
agree on terms that will leave them both better off (or at least not worse off) than
before. Exchange is a value-creating process because it normally leaves both parties
better off.
Note that exchange is a process rather than an event. Two parties are engaged in
exchange if they are negotiating—trying to arrive at mutually agreeable terms. When an
agreement is reached, we say that a transaction takes place. A transactioninvolves at least
two things of value, agreed-upon conditions, a time of agreement, and a place of agree-
ment. Usually a legal system exists to support and enforce compliance among transac-
tors. However, transactions do not require money as one of the traded values. A barter
transaction, for example, involves trading goods or services for other goods or services.
Note also that a transaction differs from a transfer. In a transfer, Agives a gift, a
subsidy, or a charitable contribution to Bbut receives nothing tangible in return.
Transfer behavior can also be understood through the concept of exchange. Typically,
the transferer expects something in exchange for his or her gift—for example, grati-
tude or seeing changed behavior in the recipient. Professional fund-raisers provide
benefits to donors, such as thank-you notes. Contemporary marketers have broadened
the concept of marketing to include the study of transfer behavior as well as transaction
behavior.
Marketing consists of actions undertaken to elicit desired responses from a tar-
get audience. To effect successful exchanges, marketers analyze what each party
expects from the transaction. Suppose Caterpillar, the world’s largest manufacturer of
earth-moving equipment, researches the benefits that a typical construction company
wants when it buys such equipment. The items shown on the prospect’s want list in
Figure 1-2 are not equally important and may vary from buyer to buyer. One of
Caterpillar’s marketing tasks is to discover the relative importance of these different
wants to the buyer.
As the marketer, Caterpillar also has a want list. If there is a sufficient match or
overlap in the want lists, a basis for a transaction exists. Caterpillar’s task is to formu-
late an offer that motivates the construction company to buy Caterpillar equipment.
The construction company might, in turn, make a counteroffer. This process of nego-
tiation leads to mutually acceptable terms or a decision not to transact.
Relationships and Networks
Transaction marketing is part of a larger idea called relationship marketing.
Relationship marketingaims to build long-term mutually satisfying relations with key par-
ties—customers, suppliers, distributors—in order to earn and retain their long-term
preference and business.^10 Effective marketers accomplish this by promising and deliv-
ering high-quality products and services at fair prices to the other parties over time.
Relationship marketing builds strong economic, technical, and social ties among the
parties. It cuts down on transaction costs and time. In the most successful cases, trans-
actions move from being negotiated each time to being a matter of routine.
The ultimate outcome of relationship marketing is the building of a unique com-
pany asset called a marketing network. A marketing networkconsists of the company and
its supporting stakeholders(customers, employees, suppliers, distributors, university sci-
entists, and others) with whom it has built mutually profitable business relationships.
Increasingly, competition is not between companies but rather between marketing
networks, with the profits going to the company that has the better network.^11